The Quick Read: It can, when the cash you net covers the kitchen and the new loan still improves your overall position. Ninety percent is not a VA rule. VA allows up to 100% of the appraised value, and some lenders choose to stop at 90%. The real test is what the whole new loan does to your budget, not only the remodel money.
Is 90% Really the VA Limit?
No. The 90% figure is a lender habit, not a VA ceiling. Per a VA program notice 26-19-05, VA guarantees cash-out refinances up to 100% of reasonable value. Across the wholesale programs we place VA files with, the cash-out reaches 100% of the appraised value, and that includes the financed funding fee.
VA cash-out estimate
Seeded with an example value, a typical balance, and a round cash request at the first-use fee; change any field.
Editable benchmark: 7.24% as of October 29, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the full-value VA cap with the first-use funding fee financed, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a VA cash-out refinance quote; a VA loan is priced by the lender at lock. The total loan, funding fee included, is capped at the program leverage on the reasonable value; the fee follows the tier chosen. The cash available is what the cap allows less the balances paid off and the fee, before closing costs, which are not included. The HELOC line is the line program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. The debt-to-income figure is a guideline; residual income decides a VA file. Licensed in sixteen states for consumer mortgages.
So where does 90% come from? Two places.
First, some lenders set their own cap below VA’s. Some tie it to your credit score. That is lender policy, and it varies from shop to shop.
Second, 90% shows up inside VA’s own rulebook as one way to pass the net tangible benefit test. The VA Lenders Handbook, Chapter 6 lists a new loan at or below 90% of reasonable value as one qualifying test. It is one door in, not a requirement.
If a lender tells you 90% is the maximum, ask whether that is VA’s limit or theirs. The answer changes how much cash you can reach.
How Does the Loan Turn Into Kitchen Dollars?
Start with the appraised value. That is the ceiling. Subtract what you owe today. Subtract the financed funding fee and the closing costs. What remains is your kitchen budget.
Here is the order, step by step:
1. The VA appraisal sets the home’s reasonable value. 2. The new loan can reach up to 100% of that value at the VA program level. 3. Your existing payoff comes off the top. 4. The funding fee, if financed, uses up some of that room. 5. Closing costs reduce the net further. 6. Whatever is left goes to you.
The funding fee on a cash-out refinance is 2.15% for first use and 3.3% for subsequent use. It is waived for veterans receiving compensation for a service-connected disability and the other exempt groups. Exempt veterans keep that room for cash.
Because the fee is a percentage of the whole new loan, not just the cash you take, it hits harder than people expect. A repeat user pays the higher tier. Subject to lender guidelines, the figures above are the program envelope, and your Loan Estimate shows your actual costs.
Will the Appraisal Count My New Kitchen?
Usually not. A plain cash-out is sized to the home as it stands today, not as it will look after the remodel. You are borrowing against the value you have, not the value you are about to build.
That is the misconception that trips up the most people. They picture a gorgeous finished kitchen lifting the appraisal. A plain cash-out appraisal does not work that way.
VA does have an alteration-and-repair route. VA’s Buyer’s Guide says VA can guarantee a loan for alteration and repair, including a cash-out refinance of a home you own and occupy. It is a narrower path. Eligible repairs have to be the kind ordinarily found on similar homes of comparable value in the community, per a VA program notice 26-18-6. A high-end design unusual for the neighborhood may not be supported by value.
Availability varies by lender. If your project is large, ask early whether any lender offers that route and how it would be appraised.
What Does It Do to My Monthly Budget?
It reprices your entire mortgage, not just the new money. That is the part most remodel budgets ignore.
A cash-out refinance replaces your existing loan. Every dollar of the balance moves to the new terms. If your current loan carries a strong existing rate, you give it up on the whole balance to fund the kitchen. If your current loan is weaker, a cash-out could improve it while it funds the project.
The CFPB notes that cash-out refinances typically carry higher rates, payments and balances than other refinances. It also notes they can put unsecured debt behind the home.
A cash-out can also stretch the repayment term. A longer term can soften the monthly payment while raising what you pay over the life of the loan. Compare both numbers on your Loan Estimate, not just the monthly one.
Ask yourself three questions:
- Is the new payment comfortable with the full balance repriced?
- Am I giving up a better existing loan?
- Would the kitchen be better funded in another way?
What Does VA Require Before I Get Cash?
Every VA cash-out has to clear a net tangible benefit test. The regulation at 38 CFR 36.4306 lists the tests. VA lists several benefits, and six common ones are:
- eliminating monthly mortgage insurance,
- a shorter loan term,
- a lower interest rate,
- converting an adjustable loan to a fixed one,
- higher monthly residual income,
- a new loan at or below 90% of reasonable value.
You only need to meet one. A lower payment is not guaranteed on a cash-out. The test can be met in other ways.
The rate-reduction and fee-recoupment tests belong to the streamlined refinance, the IRRRL. They do not apply to the VA cash-out.
You also need full underwriting. Residual income is the controlling test: the money left each month after housing costs, debts and living expenses. The 41% debt-to-income figure is a guideline, not a cap. A higher ratio needs residual income well above the table. Wholesale programs we use start at a 580 decision score, subject to lender guidelines and full file review.
Your Certificate of Eligibility from VA decides whether you qualify at all. Service requirements are VA’s rules. The home has to be one you occupy, and the lender completes a cash-out comparison and disclosure between your old and new loans.
Do I Need a VA Loan Already?
No. A cash-out refinance can move a conventional or FHA loan into a VA loan. The net tangible benefit still has to be met. A non-VA payoff is simpler in one way: seasoning does not trip you up.
If you are refinancing an existing VA loan, seasoning applies. The first payment must be at least 210 days before closing, and six monthly payments must be made. The same seasoning applies to the VA cash-out across the programs we place.
Is This the Same as a Streamline?
No. The IRRRL is a different tool. It refinances an existing VA loan into a more favorable loan, such as moving from an adjustable to a fixed structure, with no VA appraisal and a 0.5% funding fee unless you are exempt. It cannot take cash out.
If your goal is only a lower payment, the streamline may fit. If you want kitchen money, you need the cash-out, with a full appraisal and full underwriting. The funding fee is far higher on the cash-out, which is why the two should not be confused.
How Does It Compare With Other Ways to Pay for a Kitchen?
A VA cash-out replaces your first mortgage. A home equity loan or HELOC sits behind it and leaves your first mortgage alone. VA does not offer its own HELOC or home equity loan.
| Option | What happens to your first mortgage | Best fit |
|---|---|---|
| VA cash-out refinance | Replaced, whole balance reprices | Big one-time project, weaker current loan |
| Home equity loan | Untouched | Fixed project cost, keep current loan |
| HELOC | Untouched | Phased projects, flexible draws |
| Personal loan | Untouched | Smaller budgets, no lien on home |
Honestly, this is where many kitchen decisions turn. If you hold a strong existing loan, leaving it alone and borrowing separately can be the stronger play, even if the cash-out has more headroom. If your current loan is already a poor fit, the cash-out does two jobs at once.
Equity is not free money. The CFPB reminds borrowers that borrowing against equity is still debt secured by your home. Miss payments and the home is at risk.
What Are the Risks of Borrowing Near the Ceiling?
Borrowing the maximum leaves almost no cushion. If home values dip, you may owe more than the home is worth. Selling or refinancing again becomes harder.
You do not have to borrow all the equity VA allows. Take what the project needs, plus a sensible buffer for overruns. A smaller loan costs less in funding fee terms and keeps more equity in your pocket.
One more practical point: small remodels can be a poor fit. When the financing costs eat a large share of the cash you net, you pay a lot to move a little money.
Does the Math Make Sense? A Quick Checklist
It tends to make sense when:
- your net cash after fees covers the full kitchen budget,
- your current loan is not one you want to keep,
- the new payment fits your residual income comfortably,
- you plan to stay in the home long enough to absorb the costs,
- you are an exempt veteran, or the fee is small relative to the benefit.
It tends not to when:
- you hold a strong existing loan and the project is modest,
- the net cash falls short of the budget,
- a phased approach through a HELOC fits better,
- the appraisal is unlikely to support what you need.
Key Terms Defined
Net tangible benefit: A VA test showing the new loan helps you in at least one of eight listed ways.
Residual income: The money left each month after your major expenses, which VA treats as the controlling affordability test.
Funding fee: A one-time VA charge, financeable, waived for exempt veterans.
Reasonable value: The home’s value as set by the VA appraisal.
Type II refinance: A new loan above your payoff, which means you take cash.
IRRRL: VA’s streamlined refinance for lowering a rate on an existing VA loan.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Start with Lendmire’s VA cash-out refinance program page. For related reading, see Lendmire’s piece How Much Cash a VA Cash-Out Refinance Releases at the Full Value Cap.
Frequently Asked Questions
Can I use a VA cash-out refinance for a kitchen remodel?
Yes. VA describes cash-out refinances as a way to take equity out for needs like debt, school or home improvements, per the VA home loans page. The loan is still subject to lender guidelines, full underwriting and the net tangible benefit test.
Is there a VA home equity loan or HELOC?
No. VA does not offer its own. A private home equity loan or HELOC would sit behind your first mortgage. A VA cash-out replaces the first mortgage instead.
Does the home have to be my primary residence?
Generally yes. Occupancy is one of the requirements the lender reviews, and the amount of any cash-out proceeds depends on the lender’s guidelines and on the loan meeting them.
Can I get more than 90% of my home’s value?
At the program level, yes. VA allows up to 100% of the appraised value, and the wholesale programs we place with reach that figure including the financed fee. Some lenders stop lower by their own policy, so it depends on the lender.
Will the appraisal include the finished kitchen?
Not on a plain cash-out. The appraisal reflects the home as it stands. VA’s alteration-and-repair route is the exception, with limits on what repairs count.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. VA Circular 26-19-05 (cash-out refinancing)
2. VA Lenders Handbook, Chapter 6
4. VA Circular 26-18-6 (alteration and repair)
5. CFPB
7. CFPB
This article is part of Lendmire’s VA cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best VA Cash-Out Refinance Program Up to 100% of the Home’s Value · VA Cash-Out Refinance Limits for How Much Cash You Can Take · Best VA Cash-Out Refinance Program for Disabled Veterans
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.